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Goldman Sachs blunder adds to AI stock sell-off

Matthias Bastian
Matthias Bastian View the LinkedIn Profile of Matthias Bastian
Sep 8, 2024
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A flawed analysis by Goldman Sachs on ChatGPT's traffic decline caused market jitters. But the data was misread. Demand for OpenAI's services continues to grow.

A report by Goldman Sachs analyst Peter Oppenheimer added to the AI bubble story that's preoccupying financial markets. A chart in the report suggested that traffic to OpenAI's popular ChatGPT had plummeted in recent months. The Financial Times picked up the graphic, contributing to negative sentiment around AI stocks.

Monatliche Besuche der Chat-GPT-Website von 2022 bis 2024 in Millionen, mit Spitzenwerten Mitte 2023 und einem Einbruch ab Ende 2023.
Goldman Sachs' misleading chart shows a decline in ChatGPT website visits, failing to account for a domain change. | Image: Goldman Sachs

However, this was an error by the renowned investment bank. Goldman Sachs used data from Similarweb for the analysis but failed to account for OpenAI's recent domain change from chat.openai.com to chatgpt.com. Traffic to chat.openai.com naturally declined as a result.

In fact, Similarweb's own monthly AI service usage analysis paints a very different picture: ChatGPT saw 66.2% year-over-year growth and remains by far the most popular generative AI application. Competitors like Anthropic's Claude and Perplexity are gaining ground but haven't yet caught up to ChatGPT.

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Liniendiagramm: ChatGPT-Besuche weltweit steigen von 0 auf 2,5 Milliarden zwischen Nov 2022 und Jul 2024, mit starkem Wachstum und leichten Schwankungen.
ChatGPT is seeing rapid growth in global users: Desktop and mobile visits surged from November 2022 to July 2024, peaking at nearly 2.5 billion visits in June and July. | Image: Similarweb

Other indicators also point to strong demand for OpenAI's services. The company recently announced 200 million weekly active users - double the number from November 2022. Corporate business is growing, as is the use of OpenAI models via APIs. And then there are Microsoft applications that use OpenAI models, such as Github Copilot, which has also seen good growth.

Declining AI demand is not OpenAI's problem

OpenAI faces challenges, from occasionally naive communication to frustrated safety researchers and high costs. But lack of demand doesn't seem to be one of those challenges right now.

A recent analysis suggests OpenAI could generate revenue between $3.5 and $4.5 billion this year - impressive for a company that only began serious commercial operations in late 2022. However, this comes with costs of up to $8.5 billion.

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